Welcome to Hooverville

Welcome to Hooverville

In 1928, Republican Herbert Hoover was elected as president of the US. He took office in March of 1929. The following October, the stock market crashed, heralding in the Great Depression. Millions of Americans lost their jobs and homes and/or starved in the ensuing years.

Countless people, having nowhere to live, set up shantytowns that came to be known as “Hoovervilles.” Their new residents relied for the most part on public charities or begging for whatever income they could attain.

Was Mister Hoover responsible? Well, no. So why was he blamed? Well, whenever there’s disaster, it’s human nature to want to put a face on the cause of the problem. We tend to need to have someone at whom we can point our angry finger. (Almost immediately after the shooting of John Kennedy, the public were shown a photo of Lee Harvey Oswald holding a rifle; the day after the destroying of the Twin Towers, the television news showed a photo of Osama bin Laden. The viewers didn’t question whether these were indeed the culprits; they simply accepted them, as their need to have someone to blame was greater than their need to have truth.)

As a republican, Mister Hoover became an easy target for democrats seeking to further their own careers. Although the events that led up to the depression were caused by both democrats and republicans, both within politics and without, Mister Hoover was a convenient target for democrats. In fact the term “Hooverville” was created by Charles Michelson, publicity chief of the Democratic National Committee. Democrats also came up with other pejoratives, such as “Hoover blankets” for newspapers and “Hoover leather” for cardboard, when used in a shoe when the sole had worn through.

Throughout the 1930’s, hundreds of Hoovervilles sprang up, housing hundreds of thousands of recently-homeless people. There was even one in New York’s Central Park.

By ascribing the Great Depression and everything that went with it to Mister Hoover, it was a foregone conclusion that in the next presidential election, the democratic candidate would win by a landslide.

For the next twenty years, democrats held the US presidency and, in that time, the government made a major transformation towards collectivism. In spite of the fact that the Great Depression dragged on for some 17 years, few Americans grasped the fact that collectivist policies prolonged the depression, rather than alleviated it.

America has recently completed another presidential election – one in which Americans were more polarized than ever before in their history. Although celebration for the victor has been moderate, the angst felt by democratic voters has been pronounced. Countless Americans are stunned. Many have taken part in demonstrations and even riots and the remainder look out vacantly at their new world, as though they’ve been advised, “Granny’s just died and you aren’t in her will.”

The sense of disenfranchisement of democratic voters is palatable and it would not be surprising if what we’re observing is the re-election of Herbert Hoover.

Like his predecessor in 1928, Mister Trump is a highly successful businessman who has never held public office before and has been seen by his voters to represent a move away from statism. Ironically, his presidency may unintentionally create the exact opposite effect.

There are a small number of us who predicted a Greater Depression for decades and believe that we entered a Greater Depression in 2007-2008. The major negative events have been delayed repeatedly and consistently, but we feel that we’re now getting close to the tipping point, where it will be impossible to prevent the coming crashes with more band-aid solutions. We’re at the precipice of the second half of the Greater Depression – the more severe half.

If history were to repeat, Mister Trump would find that, within months of his ascendancy to the throne, market crashes would occur, followed by monetary collapse, diminishment of entitlements, loss of homes and jobs and a return to Hoovervilles. It wouldn’t be surprising if the present generation of collectivist spin doctors choose to call the new shantytowns, “Trump towers.” There can be no doubt that it would be a successful political move and, along with other pejoratives, would be extremely likely to result in a one-term presidency for Mister Trump, followed by a landslide victory in 2020 for the democratic party.

Should this occur, it would follow that the American people would take a second major lurch in the direction of collectivism, dwarfing the lurch of the 1930’s. It might also be possible that the winner of the 2020 election might become “president for life”, as did Mister Roosevelt.

And, of course, Mister Trump will be no more to blame than was Mister Hoover but, as the present economic cycle will reach the tipping point on his watch, there can be little doubt as who will receive the blame. Just as in 1929, the tail will blindly be pinned on the elephant, not the donkey, and a long era of increased collectivism will be heralded in.

To be sure, there are many of Americans who are presently hoping that a Trump presidency will mean a return to a more capitalistic US. The odd twist in this instance is that, if all republicans had supported Bernie Sanders, the crashes would occur under a socialist banner and it would be the republican party spin-doctors who would be twisting the facts in favour of capitalism after the inevitable crashes.

What I believe we shall witness in the US will therefore be not only the second half of the Greater Depression, but, in addition, the “Second Wave of Collectivism.” This may well come under what will become known as “the Purple Revolution.”

Visionary economic prognosticator Harry Schultz often predicted that the Greater Depression would be “ten years down and ten years up.” It’s now been over eight years since the onset of the depression and we’re not yet close to the bottom, which would mean that, although Uncle Harry’s prediction seemed extreme back in the early 2000’s, it’s likely to prove conservative on both sides of the prediction. It may well be that the recovery will be prolonged due to the same collectivism that dragged out the depression through the 1930’s and 1940’s.

Once again, the government itself may become the greatest deterrent to recovery, resulting in a long economic and social dry spell for those who choose to live in the US.